The Role of UNCITRAL in International Arbitration 16 July 2012 Renaud Sorieul The Secretary of UNCITRAL

Topics to be Covered Origin & mandate of UNCITRAL Structure Working methods Presentation of the work of UNCITRAL on arbitration and its significance What constitute an “UNCITRAL Model Law on International Commercial Arbitration” country The impact of divergences in enacting the Model Law Consequences of arbitration law for arbitral institutions

Origin of UNCITRAL Established in 1966 Reasons: Dramatic expansion of world trade Need for uniform rules for international trade Trade creates wealth Trade is essential to the economic stability Promotes world peace

Trade law and the UN MDGs The UN… will employ international machinery for the promotion of the economic and social advancement of all peoples (Preamble of the UN Charter, 1945) Develop further an open trading and financial system that is rule-based, predictable and non-discriminatory... [MDG 8 – Target 12, 2000] MDGs

Facilitate International Trade Mandate of UNCITRAL Facilitate International Trade Coordinate work of organizations in the field of international trade law Prepare and/or promote Conventions and Model Laws and ensure their uniform interpretation Collect and disseminate information on developments in the field of international trade law

The Role of UNCITRAL NOT INVOLVED IN INVOLVED IN Settling disputes between States Settling disputes between private parties Providing legal advice on disputes to parties INVOLVED IN Promoting the unification & harmonization of the law of international trade and assisting in domestic law reform (legislative work) Strengthening uniform application & interpretation of the instruments adopted (technical assistance) Coordinating the work of other similar organizations (cooperation with UN and non-UN bodies /organizations) UNCITRAL’s mandate is different from the World Trade Organisation’s. UNCITRAL is not concerned with setting trade rules that apply as between states. On the other hand, UNCITRAL is not involved in settling private commercial disputes either nor is it involved in giving a specific business a commercial opportunity in a particular country. UNCITRAL is concerned with whether national laws are getting in the way of doing business effectively or where an absence of laws is creating uncertainty in the position of parties. The mandate of UNCITRAL is thus to promote international business thereby creating greater wealth which will aid in the development of all countries. Laws tend to lag behind business development and the process of harmonisation has been used to bring long established practices together to adjust the laws to new techniques that have emerged and advance toward better or fairer balances between parties. 6

Membership of UNCITRAL 60 member States Elected by the UN General Assembly for a term of 6 years Every 3 years terms of half the members expire Ensure representation of the world’s various geographic regions and its principal economic and legal systems

Organization and Methods of Work Secretariat Intergovernmental Working Groups Commission

The Structure of UNCITRAL The Commission Governing body Determines work programme Reviews and adopts texts prepared by the Working Groups Composition Delegates Reports to the General Assembly of the United Nations Meetings Holds annual meetings: alternating pattern New York – Vienna 9

The Structure of UNCITRAL Working Groups *Intergovernmental bodies *Composition *Hold bi-annual meetings: alternating pattern New York City – Vienna *Develop the topics on UNCITRAL’s work programme: Technical expertise: prepare legislative & other legal standards 10

Work of UNCITRAL The Working Groups There are six Working Groups: I. Procurement II. Arbitration & Conciliation III. Online Dispute Resolution IV. Electronic Commerce V. Insolvency Law VI. Security Interests

The Structure of UNCITRAL Working Group I Procurement Just adopted in 2012: Guide to Enactment to the Revised Model Law on Public Procurement 12

Work of UNCITRAL: Examples of Achievements Procurement Model Legislative Provisions On Privately Financed Infrastructure Projects UNCITRAL Model Law on Public Procurement 2011

The Structure of UNCITRAL Working Group II International Arbitration Transparency in treaty-based investor-State arbitration 14

Work of UNCITRAL: Examples of Achievements Dispute Resolution UNCITRAL Arbitration Rules (1976 & 2010) 2002 UNCITRAL Model Law on International Commercial Conciliation 1996 UNCITRAL Notes on Organizing Arbitral Proceedings 1985 UNCITRAL Model Law on International Commercial Arbitration (amended in 2006)

The Structure of UNCITRAL Working Group III Online Dispute Resolution Online Dispute Resolution for cross-border electronic commerce transactions 16

The Structure of UNCITRAL Working Group IV E-Commerce Legal issues relating to the use of electronic transferable records 17

Work of UNCITRAL: Examples of Achievements Electronic Commerce UNCITRAL Model Law on Electronic Commerce (1996) UNCITRAL Model Law on Electronic Signatures (2001)

The Structure of UNCITRAL Working Group V Insolvency Law Interpretation & application of selected concepts of the UNCITRAL MLCBI relating to COMI D & O liabilities in insolvency & pre-insolvency cases 19

Work of UNCITRAL: Examples of Achievements Insolvency Law UNCITRAL Model Law on Cross-Border Insolvency (1997) Legislative Guide on Insolvency Law (2004 & 2010) UNCITRAL Practice Guide on Cross-Border Insolvency Cooperation (2009)

The Structure of UNCITRAL Working Group VI Security Interests Draft Security Registry Guide 21

Work of UNCITRAL: Examples of Achievements Security Interests Legislative Guide on Secured Transactions (2007) UNCITRAL Legislative Guide on Secured Transactions: Supplement on Security Rights in Intellectual Property

The Structure of UNCITRAL The Secretariat Division of UN/OLA (ITLD) Assistance to the Commission and working groups Technical Assistance and Cooperation (TAC) Research Preparation of studies and drafts 23

The Secretariat Regional Centre for Asia and the Pacific *Enhance international trade and development in the Asia-Pacific region *Provide technical assistance *Engage in coordination activities with other organizations active in trade law reform projects in the region *Function as a channel of communication between States in the region and UNCITRAL. 24

Regional Centre for Asia and the Pacific Focus Area: 25

Regional Centre: Launch Event 10 January 2012

Work of UNCITRAL Outcome ► What does UNCITRAL produce?

Work of UNCITRAL Outcome Development of different types of texts to modernize & harmonize the law of int’l trade: Conventions Model laws Legislative guides Recommendations Contractual rules Legal guides

Work of UNCITRAL Outcome Convention An agreement among States establishing obligations binding upon those States that ratify or acceded to it. Model Law A set of model legislative provisions that States can adopt by enacting it into national law.

Work of UNCITRAL Outcome Legislative guide A text that provides guidance for the development of laws, discussing relevant policy issues & choices & recommending appropriate legislative solutions. Recommendations A text that provides recommendations for the use of an UNCITRAL instrument.

Work of UNCITRAL Outcome Contractual rules Standard clauses or rules designed to be included in commercial contracts. Legal guide A text that provides guidance for the drafting of contracts, discussing relevant issues and recommending solutions appropriate to particular circumstances.

Work of UNCITRAL Publications on UNCITRAL’s work Yearbook Booklets and CD ROMs Explanatory notes Status of UNCITRAL texts

How does work get started? Secretariat Explore topic further Commission Proposal by Member State(s) on new work

How does work get started? Further exploration: *Research and preparation of Studies * Organization of an international colloquium related to that topic Presentation to Commission, able to take decision

How does work get started? Working Groups: *First session: Deliberations on the subject On the basis of paper by the Secretariat * Often: format open at the start of a new subject

Preparation by the Secretariat Working papers: *Research *Consultations with other organizations *Expert meetings

UNCITRAL Dispute Settlement Texts 2012 Recommendations to assist arbitral institutions and other interested bodies with regard to arbitrations under the UNCITRAL Arbitration Rules (2010) 2010 UNCITRAL Arbitration Rules (as revised in 2010) 2006 Recommendation regarding the interpretation of article II (2), and article VII (1), of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958) 2002 UNCITRAL Model Law on International Commercial Conciliation 1996 UNCITRAL Notes on Organizing Arbitral Proceedings 1985 UNCITRAL Model Law on International Commercial Arbitration (amended in 2006) 1982 Recommendations to assist arbitral institutions and other interested bodies with regard to arbitrations under the UNCITRAL Arbitration Rules (1976) 1980 UNCITRAL Conciliation Rules 1976 UNCITRAL Arbitration Rules 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("New York Convention”)

The New York Convention Adopted in 1958 Ensures recognition and enforcement of foreign arbitral awards (Article I, III) Gives effect to arbitration clause (Article II (3)) Limits grounds for denial of enforcement (Article V)

New York Convention: Status Universal acceptance: 146 Parties

Model Law on Arbitration Adopted in 1985, amended in 2006 A framework for the conduct of arbitral proceedings Consistent with the New York Convention Reflects world wide consensus Form of Model Law

Model Law: Main Purpose Reduce discrepancy between domestic procedural laws affecting international commercial arbitration Uniform interpretation and application of the Model Law = equally important 41

Recommendation regarding the interpretation of article II (2) & article VII (1) of the New York Convention Recognizes that circumstances in article II (2) are not exhaustive Encourages States to adopt the revised article 7 of the MAL

UNCITRAL work in arbitration Digest Recommendations Topic for next seminar on 18 July 2012

What constitutes a MAL country? No fixed criteria. But a Model Law Country should: Include key elements of the MAL & Not go against its spirit and purpose

Model Law: Status Covers more than 1/3 of the world’s territory: 90 jurisdictions ***USA: California, Connecticut, Florida, Illinois, Louisiana, Oregon, Texas 45

What constitutes a MAL country? Examples Costa Rica Adopts the MAL word for word Except for reversal of default rule in article 10(2) (1 arbitrator)

What constitutes a MAL country? Montenegro: Article 477 Code of Civil Procedure (contains arbitration law) If the arbitrator has not been appointed on time and the agreement does not state otherwise the arbitrator shall be appointed by court upon proposal of the party. If the arbitrators cannot agree as to the election of the President and the agreement does not state otherwise the President shall be appointed by the court upon the proposal of each arbitrator or a party. The court that would have been competent for the first instance procedure if the arbitration agreement had not been concluded shall be competent for appointment of arbitrator or President of the Arbitration Board. Appeal against the court ruling shall not be allowed. The party that does not want to use the authorization referred to in the paragraphs 1 and 2 of this Article may request in the complaint that the court competent for appointment proclaims the arbitration agreement null and void.

Divergences of the Model Law Consequences for arbitral institutions Restrictions in its operation Less attractive to parties

Divergences of the Model Law Consequences - Uncertainty about local law Frustration by parties of unexpected restrictions by mandatory provisions of applicable law Absence of any legislative provision may cause difficulties simply by leaving unanswered some procedural questions Impact on the selection of the place of arbitration Deterrent to foreign investment

UNCITRAL website http://www. uncitral UNCITRAL website http://www.uncitral.org/ available in all 6 UN official languages

The End of Day 1 Thank you & See you on Wednesday